Native Land Development is replicating its multifamily model around Portland.

The latest project calls for an 85-foot-tall modular building at North Minnesota Avenue and North Jessup Street. The project, Minnesota Places, would offer approximately 90 residential units in an eight-story, 54,000-square-foot structure.

Minnesota Places underwent an initial design advice hearing Thursday with the Portland Design Commission. The project will later go through a Type II staff review. It will not return to the Design Commission unless a decision by Bureau of Development Services staff is appealed.

Native Land Development has been busy. The Lacey, Washington-based developer also recently proposed an 11-story, 89-unit modular multifamily building for a property south of Portland State University. Earlier this year, the firm constructed two small stick-built multifamily buildings (one with 30 units and another with 28) along Southeast Milwaukie Avenue in Sellwood.

Minnesota Places would rise in a neighborhood of mostly single-family homes west of Interstate 5. Developers have added larger projects, however, such as Nomad, a seven-story, 130-unit building from Ethos Development and Works Progress Architecture. Nomad is nearly completed, with delivery expected in November, Ethos founding principal Paul Del Vecchio said.

The neighborhood is designed for dense urban development, said Tim Heron, a BDS reviewer. Killingsworth Station, serving the MAX yellow line, is nearby at North Killingsworth Street and Interstate Avenue.

Minnesota Places is being designed by John Wright of Wright Architecture. The structure would consist largely of mass-pressed plywood. The ground floor would have a lobby, community rooms and loading area topped by seven stories of apartments with one, two or three bedrooms apiece. BDS valued the project at $8 million.

An entry courtyard would have a colonnade using mass plywood along with metal or cementitious stucco.

The project will bring affordable housing to the neighborhood, said Austin Turner, a development consultant working with Native Land Development. Information on the affordability level of the apartments was not immediately available.

Commissioners on Thursday were largely complimentary of the design, particularly the H-shape. Commissioner Brian McCarter said the shape “does a pretty nice job of taking a building this big and breaking it down to a more human scale.”

Concerns centered on the durability of the mass plywood material in Oregon rain. Commissioner Jessica Molinar said the exposed plywood on the colonnade could present maintenance issues.

“You’re in a losing battle,” she said. “So unless the owner is willing to commit to serious maintenance of this, another option would have a much greater chance of success.”

Commissioners also took issue with the height of the ground floor and the design scheme of numerous small, vertically oriented windows.

“I am really concerned about the window-to-wall ratio,” Molinar said. “I’m worried that it will feel really institutional and not residential.”

Wright said the windows could be made about 6 inches wider without significant plan changes.

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A proposal for an 11-story, 89-unit multifamily building south of Portland State University would produce the tallest modular structure in the city.

The design for 2055-2057 S.W. Park Avenue calls for a building 85 feet tall. It would have only studio apartments, and offer no off-street parking for motor vehicles.

Plans are for the apartments to be 100 percent affordable units at 60 percent of median family income, a development consultant said.

The proposal is from Lake Oswego architect Ralph Tahran, who was a co-founder of Otak Inc. Rowen Rystadt is listed as the owner’s representative. The pair previously produced for Native Land Development two Sellwood-Moreland multifamily buildings that provided 100 percent affordable apartments using provisions of Portland’s inclusionary housing policy.

This latest development plan elicited critical comments from neighbors during a design advice hearing held virtually by the Portland Design Commission on Thursday.

The building would use an innovative construction method. The first two floors would be poured concrete, with modular units stacked on top. This would allow for faster construction and fewer impacts to the neighborhood, the project team said.

The modular design makes the quality of the street level even more important, Design Commission Chairwoman Julie Livingston said.

“So you’ve got real architectural work to do on those lower floors,” she told Tahran.

The building would primarily use light-gauge steel and mass plywood panels. The project team includes Shirley Chalupa, a DCI Engineers principal who is tasked with ensuring structural safety at the tricky site located at the base of a large hill that has a history of slides. The builder is MODS PDX.

Austin Turner, a development consultant working on financing for the project, said the team will target the 4 percent low-income housing tax credit from the U.S. Department of Housing and Urban Development, as well as a Metro affordable-housing grant, to meet the city’s inclusionary housing requirements.

“The objective is to target 60 percent or lower (area median income), and we’re looking for veterans, we’re looking for disabled, we’re looking for Native Americans that are in the area that are chronically homeless,” he said in an interview.

The apartments could be attractive to veterans because of its proximity to Portland’s large Veterans Affairs hospital, Turner said. And although the site is close to Portland State University, the units are not intended to serve as student housing, he said.

The proposal calls for a building that would be much taller than surrounding single-family houses, as residents quickly pointed out on Thursday. The neighborhood is largely made up of two-story Victorian homes that were built in the early 20th century. Taller modern buildings are located across Interstate 405 from the site.

“This new building will ruin the beauty of this side of the city,” said Qin Hong, a nearby resident.

The site is within the neighborhood overseen by the Southwest Hills Residence League.

Turner described residents’ pushback as part of a reaction to the recent implementation of new, denser zoning in Portland.

“We’d love to please everybody, but it’s zoned for change,” he said. “I think the city’s going to help us reinforce their directive.”

Design commissioners criticized some of the proposal’s elements, including a sunken courtyard and ground-floor façade that they said does not meet standards. Commissioners floated possible design changes, including additions of balconies and a rooftop patio for residents.

“It needs to distinguish itself from looking like an office building,” Commissioner Zari Santner said.

The project team will make whatever changes are necessary to meet guidelines, Turner said. “We’re meeting the Design Commission where they want us to be,” he said.

A second design advice meeting or design review hearing will be scheduled later.

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Dennis Sackhoff, like other multifamily builders in Portland, is adapting to inclusionary housing rules with a measure of creativity.

City rules, which took effect Feb. 1, 2017, require developers of multifamily buildings with 20 or more units to provide a portion of affordable units (ranging from 8 percent to 20 percent) or pay a fee-in-lieu. Sackhoff’s company, Urban Development Group, has three qualifying projects under way in the Sellwood-Moreland neighborhood in Southeast Portland.

The Sackhoff triangle includes the Yukon Flats, a completed four-story, 54-unit building on Milwaukie Avenue near hip brunch restaurants and a food-cart pod. The building’s apartments are for lease. An Yukon Flats units at rates of $1,175 for a studio and $1,350 for a one-bedroom unit.

Still under construction is a 91-unit building, also four stories, at Southeast 17th Avenue and Tenino Street, next to a sushi restaurant and near a new CVS pharmacy. The project is coming out of the ground, with first-floor framing in place.

Both Yukon Flats and the 91-unit building will have only market-rate apartments. The reason that works is because a third planned building, at 1645 S.E. Nehalem St., will include a greater-than-required ratio of affordable units via an off-site transfer. However, while the lot at that address is fenced off, no work has begun.

Sackhoff’s strategy will mean 145 market-rate units will be ready for lease before any rent-restricted affordable units become available. The delay in affordable housing construction meets the Portland Housing Bureau‘s rules, an agency spokeswoman stated.

The arrangement meets the procedures for an off-site transfer, Housing Bureau spokeswoman Martha Calhoon stated.

“Under the off-site transfer option, receiving sites are required to meet reasonable equivalency standards, and must be located either within a half-mile of the sending site or in an area with the same opportunity score (or higher) as the sending site,” Calhoon wrote in an email. “Opportunity scores are based on the services and amenities in an area so, yes, we would say that off-site transfers like the (Sackhoff projects) are accomplishing the program goals of creating more affordable housing in walkable neighborhoods near active transportation, employment centers, open spaces, high-quality schools, and various other amenities that enhance quality of life for residents.”

Sackhoff did not respond to requests for comment through David Mullens, project manager for Urban Development Group.

The number of rent-restricted affordable units that will be built at the Nehalem Street property may be in flux. Previously, the proposal was for 58 total units in four stories. Then on March 3 the developer submitted a new permit application to add a fifth floor, which would expand the project to 75 total units.

Of those original 58 units, 31 were required to be affordable to renters earning no more than 60 percent of area median income and nine units were to be affordable to renters at no more than 80 percent of area median income. The remaining 18 units would be market-rate.

With the developer’s request to add 17 units, the Housing Bureau may require a percentage of those to be affordable. The construction type would change to III-B – potentially a brick or block base with a wooden roof.

The Housing Bureau plans to conduct a market analysis to recalibrate inclusionary housing’s off-site program options to “increase flexibility and utilization,” according to the bureau’s inclusionary housing website.

A different approach

Another developer active in Sellwood-Moreland is trying an entirely different approach. Native Land Development has two multifamily projects under construction in the neighborhood: one with 28 units at 5434 S.E. Milwaukie Ave. and the other with 30 units at 5605 S.E. Milwaukie Ave.

The two projects are 100 percent affordable. All 58 units are studio apartments dedicated to inclusionary housing. Rents are $924.

The 30-unit building, while modest in size, will have the most inclusionary housing units of any building in Portland, according to a Housing Bureau tally.

“There is a lot of hype on it being super difficult to build with (inclusionary housing), but it depends on your style, how you run and your stakeholders,” said Austin Turner, a Portland development consultant who is working with Native Land.

The developer has received more than 100 rental applications for the 28 units at the first project, Turner said.

The projects are made possible via a series of public subsidies. Among them: system-development charge waivers and a 10-year property-tax exemption.

Native Land also found contractors willing to compromise on price.

“We asked people to take discounted rates to make it happen,” said Rowen Rystadt, a project manager with Native Land.

The projects were designed by Ralph Tahran, a Lake Oswego architect who was a co-founder of Otak Inc.

“I think everyone is working toward the right goal, which is increased density in these areas,” Rystadt said.

Native Land Development started in Centralia, Washington, with a focus on building affordable housing on American Indian reservations, Rystadt said. The company is led by Leah Wells-Swanson of West Linn.

Fee-in-lieu

Another inclusionary housing option allows developers to pay a fee into the Housing Bureau’s inclusionary housing fund instead of building affordable units. Developers for projects that vested before inclusionary housing took effect can also opt in to inclusionary housing to receive bonus floor-area ratio, which allows larger buildings to be built.

So far, developers of 10 properties have paid fees in lieu totaling $410,698, according to the Housing Bureau. Each opted in to inclusionary housing voluntarily to receive bonus FAR, Calhoon stated. The largest payment to date – $175,810 – came on behalf of a five-story, 88-unit hostel project at East Burnside Street and Southeast 16th^�� Avenue.

To date, no project team has opted to pay the fee-in-lieu instead of providing units, Calhoon stated. But developer BPM Real Estate Group is expected to do so for the 35-story mixed-use tower now under construction on Block 216 in downtown.

The fee-in-lieu payment will be triggered by issuance of a commercial building permit. Based on prior information provided by the project team, the fee for Block 216 is expected to be approximately $7 million to $8 million, stated Ken Ray, a Bureau of Development Services spokesman.

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